Great hack and worth doing just because it is a great hack, but since it was a senior project, wouldn't it have been easier to just grab an old Android phone off Ebay and use standard 2-way communication directly?
Possibly. It was an embedded systems class, and I have a background dealing more with webdev and audio systems, so I figured I could combine all three into something novel. It actually worked out really well for the purpose, which was supposed to be a power-saving application. This way required only the addition of a comparator chip between the ATMega168 and the headphone line, which made it a super low power (and computationally light) way to communicate.